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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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Next On The List For Kicks Upwards After an Earnings Report Comes Out. Ford

Look at this. A five day chart on Ford showing a one dollar bounce on the release of their earnings report.
When earnings come out stocks and options will jump. Catching a one dollar price swing on a twelve dollar stock for option players can be huge. Apparently their earnings were better than expected, however the yardsticks used to measure success can sometimes be short sighted. Sales were up, that seems to be for the short term the most important thing. Ford has however lost market share over the last few years.
Here is a mid afternoon look at how one series of Call options look. It only really shows part of the action.
One point is that you could have been waiting for this opportunity. The second point is that watching a ten dollar stock is not as exciting as watching a $600.00 stock like Eli Lilly. A run of recent good earnimg reports has caught many option traders sleeping. Ford options plays on their "earning-report-releases" are a staple to come back to time and time again, for many option players.

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Living on Kraft Dinner?

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What does the word disconnect mean? As a verb it means "to sever or interrupt the connection of or between; detach". Option trading - one day options - is a disconnect from the world. What happens to slightly "out-of-the-money" Call options on Costco when the stock shoot up thirty dollars on the day? I will show you what happened on Friday to Costco Calls and the options on a few other stocks I frequently watch. What a disconnect from the real world. But before that a look at how the indexes traded. 1) Costco. It's five day chart and a look at how three of it's option series moved upwards in one day. You may not know how to read these printouts but try to read the highs and lows on these option pricings. One printout shows an "at-the-money" option which means you are buying a contract on the stock, good for one day only at a locked in price equal to (or very close to) what the stock is currently trading at. The other two contracts shown are ...
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